USFR Weekly Recap - October 27-28, 2012

Hello and welcome to U.S. Farm Report, I’m John Phipps. Those wacky farmers in Iowa just set another mind-boggling record for farmland prices this week - $21,900 per acre. And I’m not sure how long that record will stand.The corn belt is moving north and west, and the market is showing exactly where good results have been happening and more importantly, where buyers think the best production conditions will be. The premiere prices of central Illinois have faded as extra degree-days have moved the sweet-spot for corn production. This is why arguing about the effect of climate change is a waste of time. It's no longer academic debate - it's an economic opportunity.

HEADLINES:

It was a tough week on Wall Street as earnings reports from several major companies were less than positive. Chemical makers - Dow and DuPont - both announced major job cuts. At the same time, however, both said their agriculture divisions were one of the few highlights of a poor-financial picture.

Meanwhile, DuPont Pioneer says its agricultural sales increased four % in the third quarter. The company says profits in their AG division jumped - crediting a strong start to the southern hemisphere planting season. Dupont Pioneer says it's now tracking to finish the year on target. There's no "tumble" in harvest as it's quickly coming to an end for many farmers in the cornbelt. As of Monday, 87% of the nation's corn crop is harvested. The five year average is 49%. Soybeans are not too far behind with 80% in the bin. Minnesota and the Dakotas have finished those fields. Widespread drought in the United States receded slightly for the fourth week in a row. But the latest U.S. drought monitor map also shows the area in exceptional drought - centered over Nebraska - is unchanged. Nearly all of that state is under an extreme or exceptional drought. And about half of the country is still considered in a severe drought or worse, very little improvement from last week. Japan is set to enter the final phase of easing restrictions on beef imports from the United States and other western nations. Meanwhile, agricultural trade with Panama could see a dramatic shift starting this week. The long-sought free trade agreement with Panama will enter into force on Wednesday. The FTA means the removal of some tariffs and other trade barriers on U.S. made products.The National Cattlemen's Beef association says implementation of the FTA immediately eliminates the 30% tariff on prime and choice beef cuts.

A startling, but somewhat misleading news headline recently announced the unthinkable prediction the U.S. could replace Saudi Arabia as the world's leading oil producer by 2020. This projection is true only if you include liquid hydrocarbons such as propane and butane, but the overall idea is still valid. Only a few years ago, the U.S. imported 60% of its oil, producing 40% domestically. Today those figures are reversed. More importantly, nobody - and I mean nobody - predicted this rapid change. While I have spoken before about the natural gas boom, that market seems to be in enormous oversupply, so that drilling rigs are switching to oil - and using the same fracking techniques to bring new supplies online. This is clearly good news for our economy, generating jobs and more importantly, greater immunity to oil price shocks. Keep in mind too; the oil we do still import is overwhelmingly from the western hemisphere. This bonanza is less helpful for the struggling alternative energy business, especially wind and solar. In fact, wind energy could hit the doldrums as cheap electricity from natural gas and federal subsidy cutbacks impact their bottom line. Coupled with the equally impressive efficiency gains in all kinds of engines, our energy picture is looking markedly brighter than just months ago. This is happening just in time, too - we need every dollar we can find right here at home.

2ND HALF

JOHN’S OPEN:

Hello and welcome to U.S. Farm Report, I’m John Phipps. I have been watching the stories about Google and their autonomous car development. What was once a page 12 curiosity is actually starting to look like something that could happen. There are clearly many issues to be solved, but they don't look to be beyond our technology. One tip-off has been the handful of states working on legislation to permit self-driving cars. There are enormous possible impacts from this technology. One that rural America needs to keep in mind is this: if your commuting time could be spent reading or working, how much farther would you live from work? Sprawl could get a second wind.HEADLINES:

Are there more health benefits to your children if you feed them organic food? Not necessarily according to the American Academy of Pediatrics. The group of doctors said this week it's less clear whether spending the extra money on organic foods will bring a significant benefit to children's health.

The 'real' seal has been around for years. It let shoppers distinguish real dairy or cheese products from processed imitations. But currently it's being used very little, even while competition in the food aisle increases. Kozak says there are also plans to start stacking the real seal with other images or phrases similar to the popular 'Made in America' icon. One of the nation's largest grocers has pulled fresh sprouts from its produce aisle and has no plans to replace them. FFA members are taking a hands-on approach to fight hunger in this country. And they proved it this week during the national convention in Indianapolis.

TENNESSEE WITCH:

A word of caution should you visit Adams, Tennessee. It's in that small town where you'd better beware of the spirit Kate - more famously known as "the Bell Witch." But as Chuck Denney reports, some local farmers say the Bell Witch is good for their business.

BAXTER BLACK:

This week Baxter Black shares a story from heart. It's a love story - that only a cowboy might understand.

TRACTOR TALES:

Al, what's on tap for tractor tales this week?"John, I’d like to introduce you to Carl and his Case VAS.

CHURCH SALUTE:

Today's country church salute goes to French Creek Lutheran Church in Ettrick, Wisconsin. It was founded by seven families who emigrated from Norway. The congregation was founded in 1862. The settlers believed the church as the most important factor in building their community. They met in the homes of their members. But in 1878 they built their first church. The church was first served by Doctor Lauritz Larson. Pastor Anna Sorenson leads the congregation today. Congratulations to French Creek Lutheran on their 150th anniversary.

MAILBAG:

Time now for our weekly look inside the Farm Report mailbag. John Hallock asked us for the latest college rankings:

As always, we want to hear from you, send comments to mailbag@usfarmreport.com or leave us a voice mail at 800-792-4329.